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SALT LAKE CITY (AP) -- A Provo man was arrested Friday on charges of mail fraud, tax evasion and wire fraud for a five-year investment scheme that allegedly defrauded investors of millions.
Albert Earl Carter, 61, was indicted by a federal grand jury on 22 counts, each carrying a penalty of up to five years in federal prison.
The indictment alleges that at various times between 1995 and 2000 Carter was the managing director of Allied International Resources, which solicited about $3 million from investors. Letters mailed to victims claimed that investments would last 12 months, and be protected by a guarantee against loss for 108 percent of the investment.
The letter allegedly represented that an investor could expect 200 percent of the investment at the annual anniversary date.
The letter also said that the proposed investment was "safer than Certificates of Deposit at your local bank," the indictment said.
Unsealed Friday, the indictment claims that Carter was based in Utah but solicited investors through fax, voicemail and letters in Indiana, New York, Idaho, Florida and California.
About $1.2 million of investor funds were used to repay earlier investors, according to the indictment.
In January, government investigators announced indictments or charges against seven people operating independently in similar schemes.
The FBI said criminals dupe early investors by making monthly "interest" payments from the proceeds of other investors until the pyramid scheme collapses.
"This is the same kind of scheme, but it has nothing to do with those people," said Melodie Rydalch, Utah spokeswoman for the U.S. Attorney's Office. "They use a top secret bank opportunity that the general public doesn't know about."
The indictment against Carter also alleges that in 1996 he had a taxable income of at least $215,000 and owed at least $75,000 in taxes. He allegedly didn't file tax returns for at least two years and used a credit card from an offshore bank to pay personal expenses.
(Copyright 2003 by The Associated Press. All Rights Reserved.)
